Brigido B. QUIAO, petitioner, vs. Rita C. QUIAO, Kitchie C. Quiao, Lotis C. Quiao, Petchie C.

Quiao,
represented by their mother Rita Quiao, respondents.
G.R. No. 176556. July 4, 2012
TOPIC: Effects of annulment – on the property regime of the marriage
FACTS:
 Brigido and Rita were married sometime in 1977. The Civil Code (not Family Code) governed their
marriage, and because they did not stipulate a property regime, theirs was automatically a Conjugal
Partnership of Gains. In 2000, Rita filed a complaint for legal separation against Brigido.
 October 10, 2005 – the RTC granted the separation. It also ruled that:
o Rita gets custody of the three minor children;
o The eight remaining properties be equally divided between the spouses, subject to the
respective legitimes of the children and the payment of unpaid conjugal liabilities;
o Brigido’s share of the net profits earned by the conjugal partnership is forfeited in favor of
their common children; and
o Brigido must reimburse attorney’s fees and litigation expenses.
 No motion for reconsideration or appeal was filed afterwards.
 Rita & co. filed a motion for execution on Dec. 12, 2005. It was granted on Dec. 16, and the Writ of
Execution was issued on Feb. 10, 2006. On July 6, 2006, Brigido partially complied by paying his
share of the conjugal share, the attorney’s fees, and the litigation expenses.
 July 7, 2006 – Brigido filed a Motion for Clarification before the RTC, asking them to define the term
“net profits earned”.

RTC RULING:
 August 31, 2006 – the RTC defined the term as “the remainder of the properties of the parties after
deducing the separate properties of each spouse and the debts.” In this Order, the RTC also said
that, because “the offending spouse” (Brigido) has no right to the remainder of the properties, it
shall be forfeited in favor of the common children pursuant to Arts. 63(2) and 43(2) of the Family
Code.
 November 8, 2006 – after Brigido filed a Motion for Reconsideration, the RTC issued another Order.
Here, the RTC held that the “net profits earned” should be computed in accordance with Art.
102(4) of the Family Code.
 January 8, 2007 – this time, Rita filed a Motion for Reconsideration and this Order set aside the
Nov. 8 Order, and reinstated the Aug. 31 Order.

ISSUES:
1. WON the October 10, 2005 Decision of the RTC was final and executory by the time the July 7,
2006 Motion was filed.
2. Whether Art. 129 or Art. 102 of the Family Code applies in the computation of properties in this
case.
3. What is the meaning of the term “net profits earned”?

HELD: October 10, 2005 Decision of the RTC affirmed; January 8, 2007 Order of the RTC clarified.
1. Yes, it was.
 Brigido argues that he was questioning a void judgment, therefore he was not limited by the
reglementary period to appeal. This is not the case, because a judgment is void only when
the court rendering it has no power to grant the relief, or no jurisdiction over the subject
matter or the parties. The RTC in this case had the power and the jurisdiction over the case,
hence, the judgment was not void. Being valid, the Decision attained finality when no appeal
was filed within the reglementary period.

2. Art. 129 applies.

 While the couple was married before the effectivity of the Family Code, their separation took
place when the said Code was operative; therefore, the Family Code is the applicable law in
the liquidation of CPG assets and liabilities.
  Brigido did not lose his vested right in the properties because he was accorded his right to
due process, evident in the court processes he went through. Also, Art. 176 of the Family
Code specifically states that the guilty spouse must forfeit his/her share in the conjugal
partnership profits.
 Also, because the RTC’s Decision stated that Art. 129 of the Family Code applies, and
because that Decision is final and executory, then Art. 129 should apply.

3. Art. 102(4) of the Family Code provides that “net profits earned” “shall be the increase in value
between the market value of the community property at the time of the celebration of the marriage
and the market value at the time of its dissolution.”
 For the purposes of dissolution and liquidation, the definition of Art 102(4) shall govern, both
for ACP (Art. 102) and CPG (Art. 129). With Art. 129, Art. 102(4) only serves to DEFINE “net
profit”.

 ACP:
a. An inventory listing separately the absolute community properties and the exclusive
properties of each spouse shall be made.
b. Debts and obligations of the absolute community will be paid out of the absolute
community’s assets. If insufficient, the separate properties of each spouse will be
solidarily liable.
c. Whatever’s left of the separate properties will be returned to each spouse.
d. The net remainder of the absolute community is its net assets, which will be divided
equally between the spouses.
e. To compute net profits subject to forfeiture: [net profits] = [market value of the absolute
community (net assets after payment of debts) at the time of dissolution] – [market value
of the absolute community at the time of celebration of marriage] (Note: the presumption
is that, over time, the absolute community’s value increased from the time they were
married to the time they decided to call it quits.)

 CPG:
a. An inventory listing separately the conjugal partnership properties and the exclusive
properties of each spouse shall be made.
b. Amounts advanced by the conjugal partnership in payment of personal debts of either
spouse shall be credited as assets of the conjugal partnership.
c. Each spouse will be reimbursed the exclusive funds used to buy property, or the value of
exclusive property, if the law transferred ownership of such properties to the conjugal
partnership.
d. Debts and obligations of the conjugal partnership will be paid out of the conjugal
partnership’s assets. If insufficient, the separate properties of each spouse will be
solidarily liable.
e. Whatever’s left of the separate properties will be returned to each spouse.
f. The loss or deterioration of movables belonging to either spouse, if used for the benefit of
the family, shall be paid to the corresponding spouse from the conjugal funds.
g. The net remainder of the conjugal partnership properties is its profits, to be divided
equally between the spouses, unless otherwise stipulated/provided.
h. Presumptive legitimes of the common children shall be delivered upon the partition (Art.
51).
i. The conjugal dwelling and the lot on which it is located shall go to the spouse with whom
majority of the common children remain, unless otherwise stipulated. The court will
decide, if there is no majority.

 In both situations, applied to this case, Brigido gets nothing.

DISPOSITIVE PORTION: WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial
Court, Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for Clarification dated July 7, 2006 in
the Regional Trial Court, the Order dated January 8, 2007 of the Regional Trial Court is hereby
CLARIFIED in accordance with the above discussions.

DOCTRINE:
 Whether because of annulment or legal separation, Arts. 102 and 129 of the Family Code
apply when it comes to liquidation of Absolute Community assets and Conjugal Property
assets, respectively, depending on the property regime of the spouses.
 Without stipulation, marriages before the Family Code are under CPG, and marriages after
are under ACP.